The retail billionaire has been pursuing a deal for months without making a full takeover bid. Under the plan now being considered he would pay £43m for the 70 per cent of Debenhams shares Sports Direct does not already own.
Shares in the struggling department store chain were up almost 50 per cent at 3.3p this afternoon.
Debenhams has been desperately trying to obtain new finance as it attempts to stay afloat. In a statement late on Tuesday evening, Chris Wootton, deputy finance chief at Sports Direct took aim at Debenhams’ banks.
He said: “Debenhams shareholders, both major and minority, are sick and tired of being ignored, cast aside and trampled underfoot by the lenders of Debenhams who, through the incompetence or, worse, collusion of the board, are allowing these critical stakeholders in the business to be wiped out.
“This is the shareholders’ chance to fight back.
“We reiterate our prior comments that we will leave no stone unturned in pursuing those responsible for this long-planned theft.”
It also emerged that hedge fund manager Crispin Odey’s firm had built up a 5.2 per cent stake in Debenhams, as well as a 7.9 per cent short position.
Mr Odey is famed for making £220m in one day by betting against the pound before the EU referendum.
At the time he said: “This is a good day for me. I was brave. I had a lot of clients who were angry with me but they won’t be quite so angry this morning. Life is not about being unbrave at the right time. We in the City have certain skills.”
Mr Odey previously helped Mr Ashley in 2017 through a boardroom dispute by backing former Sports Direct chair Keith Hellawell, who was kept on despite opposition from shareholders.
Debenhams said this week that any firm offer from Mr Ashley’s Sports Direct would be given “due consideration” but that this would not address its immediate need for cash.
The company, which traces its history back to 1778, is facing collapse unless it can secure emergency funding.
Mr Ashley’s attempts to take over the company have resulted in an increasingly bitter public spat, which has seen him twice propose the ousting of Debenhams’ board. Sports Direct has also offered to loan money to the troubled department store.
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